Introduction
As international tax landscapes evolve, individuals who once benefited from Portugal’s Non-Habitual Resident (NHR) regime are now approaching a critical juncture. The expiration of NHR status presents not only a substantial increase in tax liability but also a pressing need for sophisticated and forward-thinking tax planning.
At Y. Vasiliou Law, we are closely monitoring this development and actively collaborating with trusted partners to support individuals navigating the post-NHR transition. Cyprus, with its exceptionally favourable tax and residency framework, offers a compelling strategic alternative.
Understanding the End of Portugal’s NHR Benefits
The Portuguese NHR programme, long heralded for its tax efficiency, provides a 10-year window of significant advantages, such as:
- A 10% flat rate on foreign pension income
- Reduced or exempt taxation on dividends, interest, and capital gains
- A 20% flat tax on qualifying local employment income
- However, upon conclusion of this period, individuals are automatically subjected to Portugal’s standard tax regime, resulting in:
- Progressive income tax rates up to 48% on global income
- Capital gains taxed at 28%, or 35% for income from jurisdictions on Portugal’s blacklist
- Full progressive taxation on pension income, eliminating the 10% flat benefit
- No grandfathering or extension provisions under current legislation
- For many—particularly retirees, investors, and international professionals—this change can lead to a dramatic increase in tax exposure.
Cyprus: A Robust Alternative for High-Net-Worth Individuals and Retirees
- Cyprus has emerged as a tax-efficient jurisdiction for individuals seeking long-term financial stability and clarity.
- Through its non-domiciled (non-dom) regime, Cyprus offers:
- 0% tax on worldwide dividends and interest income
- 5% flat tax on foreign pensions
- No inheritance, wealth, or gift taxes
- Flexible residency routes via the 60-day or 183-day rules
- A business-friendly environment, with a low corporate tax rate of 12.5% and access to the EU’s network of tax treaties
These features make Cyprus particularly attractive for those seeking to preserve capital, optimise pension distributions, and structure their wealth efficiently within a compliant EU jurisdiction.
Tailored Cross-Border Solutions from Y. Vasiliou Law
At Y. Vasiliou Law, we are well positioned to assist individuals transitioning out of the NHR framework by offering:
- Strategic relocation planning to Cyprus
- Dual-residency structuring, optimising legal and tax positions
- Customised pension and investment structuring, aligned with Cyprus’ non-dom advantages
- Cross-border legal coordination with tax professionals and advisors in Portugal and beyond
- Our team provides discreet, expert-driven solutions tailored to high-net-worth individuals, retirees, and international professionals seeking to safeguard their wealth in the post-NHR landscape.
Contact Us
If you are nearing the end of your NHR period in Portugal and would like to explore Cyprus as a strategic alternative, we invite you to contact our team for a confidential consultation.
📞 Tel: +357 24727313
📧 Email: [email protected]
